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Friday, July 29, 2005

Vehicle Repair Liens in California

Question: We are a small body shop in California. We released a car that we had repaired to a customer with a balance of $453.80 in April. We have received no payment from the customer since May and have received numerous excuses of why he cannot pay the balance of $187.82. He signed a contract agreeing to pay $125 every other week until the balance was paid in full. The contract he signed contains a clause that states we retain the right to have a lien on the vehicle. We have mailed a certified return receipt demand letter for the balance owed received an angry phone call but no payment. Since the car has left our shop, can we legally repossess the vehicle and what is the proper procedure to follow?

Answer: You do not have any lien rights on this vehicle. In California, the legal requirements for an automobile mechanic or body shop to assert a lien for unpaid repairs is governed by Civil Code Section 3068. Your biggest problem is that the lien is based on possession of the vehicle, so you lost any lien rights you may have had when you released it back to the customer.

Your lien begin when you present the registered owner a written statement of the charges or 15 day after the work is complete, whichever occurs first. There are further steps that must be taken under the code and failure to act quickly could result in the loss of lien rights.

Although you have lost your lien rights, you still have the option of suing the owner in small claims. With a small claims judgment, you can assert a judgment lien on the car or other assets of the debtor. For more information on small claims, please visit my website.

2 comments:

Question: About 5 weeks prior to this date I dropped my Porsche off to be worked on per an agreement with the owner of a repair shop. We spoke of possible repair costs (estimate was $550.00) and a timeframe for completion was NOT set due to his overload of work. I agreed and was not worried about the time as I have other transportation. I had not heard from the shop after 4 weeks and I get a letter (regular mail) in my box that he's lein selling it for storage and repairs ($650.00 repairs and $550 for storage for 4 weeks).

Point here is I gave him my phone number, name and address. The only phone number have is my cell phone which logs all calls and I never received a call or a letter from him to come and get the car. I have my phone records for the period to prove this.